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N.A.M.E.S. v. SINGER
Factual and Procedural Background
In June 1976, petitioner (N.A.M.E.S.) and respondent (Harvey Singer) entered into a written agreement whereby petitioner agreed to perform repair and painting work on a vessel owned by respondent. The agreement was a printed form signed by respondent, with a notice under his signature referring to provisions on the reverse side, including an arbitration clause. After completion, respondent alleged unsatisfactory work and refused payment. Petitioner filed a demand for arbitration pursuant to the arbitration provision, but respondent refused to arbitrate. An ex parte hearing resulted in an award favoring petitioner. Petitioner then filed a petition to confirm the arbitration award, which respondent opposed. The trial court found no assent by respondent to the arbitration provision and dismissed the petition.
Legal Issues Presented
- Whether the respondent was bound to arbitrate under the arbitration provision contained in the written agreement he signed, despite his claim of unawareness of the provision.
- Whether the arbitration provision was sufficiently disclosed to respondent to bind him to arbitration.
- Whether respondent's refusal to arbitrate and failure to seek judicial relief upon receiving the arbitration demand affects his obligation to arbitrate.
Arguments of the Parties
Respondent's Arguments
- The agreement was prepared by handwritten insertion on a form from a pad, and respondent's attention was not called to the arbitration provision.
- Respondent was unaware of the arbitration provision until served with the arbitration demand.
- The arbitration provisions were not revealed to respondent before or after signing the agreement.
- The agreement was allegedly one of adhesion, implying possible pressure or lack of alternatives.
Petitioner's Arguments
- The arbitration provision was clearly printed on the reverse side of the signed agreement, with a conspicuous notice immediately below respondent's signature.
- Respondent is bound by the terms of the signed agreement even if he did not read or was unaware of the arbitration clause.
- The agreement is not one of adhesion; respondent was free to seek other service providers.
- Petitioner was entitled to proceed with arbitration without first petitioning the court to compel arbitration.
- Respondent could have challenged the arbitration demand in court but chose not to do so, thus waiving objections.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Windsor Mills, Inc. v. Collins Aikman Corp. (1972) 25 Cal.App.3d 987 | Exception to the general rule that a party is bound by signed provisions even if unread, where arbitration clause is hidden or not adequately disclosed. | The court distinguished the present case from Windsor based on factual differences: the arbitration clause here was prominently printed and clearly legible, unlike the buried, small print clause in Windsor. Therefore, Windsor was deemed inapplicable. |
Court's Reasoning and Analysis
The court recognized the general legal principle that a party is bound by the terms of a signed agreement, even if the party did not read or was unaware of certain provisions. Respondent relied on Windsor Mills, Inc. v. Collins Aikman Corp. as an exception to this rule, where the arbitration clause was not adequately disclosed. However, the court found significant factual differences: in this case, the arbitration clause was clearly printed in a prominent position, with a boldface notice immediately below the respondent's signature referencing provisions on the reverse side. This contrasted with the inconspicuous and compressed presentation in Windsor. The court concluded that respondent had ample opportunity to discover and understand the arbitration provision and that his failure to do so does not excuse his obligation to arbitrate.
Additionally, the court addressed respondent's arguments that the contract was adhesive and that petitioner should have petitioned to compel arbitration. The court found no evidence of adhesion or coercion and stated there was no legal requirement for petitioner to file a petition under section 1281.2 before demanding arbitration. Respondent could have challenged the arbitration demand in court but elected not to, and therefore cannot now contest the obligation to arbitrate.
Accordingly, the trial court's dismissal of the petition to confirm the arbitration award was erroneous.
Holding and Implications
The order dismissing the petition to confirm the arbitration award is reversed. The case is remanded with directions to vacate the dismissal and enter an order confirming the arbitration award.
The direct effect is that petitioner’s arbitration award is to be confirmed and enforced. The court’s decision clarifies that clear and conspicuous arbitration provisions printed on the reverse side of a signed agreement bind the signatory, even if the signatory claims unawareness, provided the notice is adequate and legible. No new precedent was established beyond the application of existing principles distinguishing this case from Windsor Mills.
OPINION
KINGSLEY, Acting P.J.
Petitioner appeals from an order, made pursuant to section 1287.2 of the Code of Civil Procedure, dismissing its petition to confirm the award of an arbitrator.
In June 1976, petitioner and respondent entered into a written agreement whereby petitioner agreed to perform certain work of repair and painting on a vessel owned by respondent. The agreement was in a printed form used by petitioner, signed by respondent. Directly under respondent's signature there is printed, in type of the same size as that used for the rest of the form, the words "Subject to Provisions on the Reverse Side." On the reverse side of the form appear four provisions, the last of which provides for arbitration. After the work was completed, respondent contended that it had not been done satisfactorily and refused payment. In accordance with the arbitration provision, petitioner filed a demand for arbitration; respondent refused to arbitrate and an ex parte hearing was held resulting in an award in favor of petitioner. It then filed its petition to conform to which respondent objected. The trial court held that there had been no assent by respondent to the arbitration provision and dismissed the petition.
Respondent's declaration contends that the agreement was prepared, by handwritten insertion of the work to be done, on a form that was part of a pad, bound at the top, that his attention was not called to the arbitration provision and that he was unaware of it until he was served with a copy of the demand for arbitration. The declarations are in conflict over whether respondent was given a copy of the agreement and the trial court's findings do not resolve that issue. The findings are only that:
"1. On June 15, 1976, Petitioner and Respondent entered into a written agreement for repair and renovation of Respondent's boat by Petitioner.
"2. The arbitration provisions of said agreement, contained on the reverse side of Petitioner's bid form, were not revealed to Respondent on or before June 15, 1976 or at any time thereafter until Petitioner demanded arbitration.
"3. Respondent was not aware of the arbitration provisions' existence or the terms thereof until arbitration was demanded." Those findings are consistent with respondent's claim that his attention was not called to the arbitration provisions and that he was not aware of them; they do not negate the possibility that he was given a copy which he did not read.
(1) Both parties are in agreement that the general rule is that a party is bound by provisions in an agreement which he signs, even though he has not read them and signs unaware of their existence. Respondent relies on our decision in Windsor Mills, Inc. v. Collins Aikman Corp. (1972) 25 Cal.App.3d 987 [ 101 Cal.Rptr. 347], wherein this court recognized an exception to that general rule. In Windsor the agreement form contained a reference to provisions on its reverse side, one of which was an arbitration clause. As we pointed out in our opinion in that case, the portion of the face of the agreement, which occupied twelve lines in the printed opinion, was, in the form, compressed into nine lines of type, occupying only five-eighths of an inch of vertical space and five and three-sixteenths of an inch of lateral space. In the case at bench the reference is printed in boldface, in the type size used for the entire agreement, prominently centered immediately below the place where respondent's signature appears. In Windsor the arbitration provision was buried among a page-long group of provisions, printed in the smallest type and scarcely legible. In the case at bench, the arbitration provisions are in substantially larger type, double spaced and clearly legible.
We conclude that those factual differences render Windsor inapplicable to the case before us. Respondent had ample opportunity to advise himself of the fact that he was assenting to arbitration; that he chose not to do so is no defense to his obligation to arbitrate.
I
Because they are argued vigorously in the briefs, we comment on two points raised by respondent:
(a) (2) The agreement before us is not one of adhesion. There is nothing to show that respondent was under any kind of pressure to enter into a contract at once, or that he could not have availed himself of other of the many similar facilities in the Los Angeles area.
(b) (3) While, when respondent advised the chosen arbitrator that he was unwilling to arbitrate, petitioner might have instituted a petition, under section 1281.2 of the Code of Civil Procedure, to compel arbitration, we know of no legal requirement that it do so. It was entitled to do, as it did, and serve its demand for arbitration on the arbitrator designated in the agreement. As Windsor shows, respondent, on receipt of a copy of that demand, could have sought the aid of the superior court, by a complaint for injunction, to test his contention that no binding agreement to arbitrate existed. He chose, instead, to ignore the whole matter. He cannot here complain that he was wrong.
The order is reversed with directions to vacate the order of dismissal and enter a new, and different, order confirming the award.
Jefferson (Bernard), J., and Alarcon, J., concurred.
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